I run an organization called The Leapfrog Group with a membership of highly impatient business leaders fed up with problems with injuries, accidents, and errors in hospitals. I can't stand the sight of blood but I've worked in healthcare over 20 years, including a rural hospital system, Mayor Rudolph Giuliani's health policy office, and the National League for Nursing. Follow me on twitter: @leahbinder.

From Nikki Haley: A Post-Election Republican Vision for Healthcare

Mitt Romney’s defeat preserves Obamacare for at least another four years. Now Republicans need a health strategy that goes beyond wholesale rejection of the President’s health reform bill. What is the GOP policy platform for post-election healthcare?

One place to start looking: South Carolina, where Governor Nikki Haley leads a series of closely watched reform initiatives. Haley’s approach aligns the public and private sectors to drive a market for improved care in her state – something that appeals to both Obamacare’s and the GOP’s core. In a recent blog of the influential Washington policy journal Health Affairs Governor Haley’s Chief of Health & Human Services Tony Keck detailed the South Carolina model. As Keck characterizes it, the South Carolina plan focuses on fixing the health care system, while the Obama administration focuses on fixing the health insurance system. There’s a difference.

While elements of Haley’s healthcare policy appeal to both sides of the aisle, it’s not completely bi-partisan. For instance, Governor Haley does not support the State accepting money from Washington to expand Medicaid benefits under Obamacare. As Keck puts it, Governor Haley believes this expansion “will ultimately hurt the poor, hurt South Carolina, and hurt the country by doubling down on a system that already delivers some of the lowest value in the world.” Haley argues there is already sufficient money in the system to support excellent health care for South Carolinians, but the process of delivering that care is wasteful. Because of this, the Governor’s plan focuses on reforming the delivery system by driving a market for the best health care at the best price.

A hallmark of the Haley administration’s plan is aligning the State with private sector players like GE, Boeing, Wal-Mart, The Leapfrog Group and others through an initiative called Catalyst for Payment Reform to formulate a more sensible payment system for health care services in South Carolina. The idea is to pay doctors and hospitals based on how good a job they do for their patients. This type of “pay for performance” is common in most industries – but healthcare doesn’t operate like most industries. The first step toward achieving Haley’s vision is by opening up the “black box” of hospital billing that confuses consumers and blurs the basic concepts of a free market: paying appropriately for services of real value. By improving transparency, South Carolinians can see for themselves the quality and cost of the services available to them and ultimately drive a market for the best care at the best price. Moving forward, I would urge the Governor to look at some of the work done by the South Carolina Business Coalition on Health that partners with The Leapfrog Group to improve the quality and transparency of hospital care.

Haley is not alone in trying to tie payments to performance. Obamacare includes promising provisions for improving the way we pay for health care. There are significant initiatives underway through the Patient Protection and Affordable Care Act to pay hospitals based on their patient safety. However, the Haley approach brings the private sector into the equation, so the State and the business community jointly exert a market demand for quality, transparency, and cost-effectiveness.

With transparency comes clarity: preventive measures (both for patients and hospitals) can have a big impact on healthcare costs. Governor Haley’s plan introduces some innovative initiatives to reduce emergency room use. South Carolina rewards physicians and nurses who are smart in using technology to better coordinate the many services individual patients may need – this better coordination cuts waste, and costs. But more than that, the State isn’t sitting back and waiting for patients to arrive at the ER when it’s too late. South Carolina officials are working with community health workers, convenient care clinics at drug stores and other local community resources to reach out to people where they live and work to keep them as healthy as possible. South Carolina has made it clear: prevention pays in both dollars and lives.

The jury’s still out on whether South Carolina’s model will prove to be the best or most effective model – there will (and should be) debate about the rejection of Medicaid expansion dollars. However, it’s encouraging to see new ways of thinking about our outsized healthcare problem. The debate about health care will not be solved without the best leaders at the table. Those leaders will come from our communities, our businesses and yes, even our government. One of those early leaders to date is Nikki Haley, and GOP should listen closely to her vision, as it just might be what they need to navigate their new post-election reality.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.